Eversource Energy Q2 2025 Filing Summary
Business Context and Reporting Period
This Form 10-Q covers the quarterly period ended June 30, 2025, for Eversource Energy and its wholly-owned regulated utility subsidiaries: The Connecticut Light and Power Company (CL&P), NSTAR Electric Company, and Public Service Company of New Hampshire (PSNH). Eversource operates as a public utility holding company providing electric, natural gas, and water distribution services to approximately 4.6 million customers in Connecticut, Massachusetts, and New Hampshire. The filing includes combined financial statements for the parent and subsidiaries.
Key Financial Metrics (Six Months Ended June 30, 2025)
- Operating Revenues: $6.96 billion (up 18.6% from $5.87 billion in 2024).
- Net Income Attributable to Common Shareholders: $903.5 million (up 5.4% from $857.2 million in 2024).
- Diluted Earnings Per Share (EPS): $2.45 (up from $2.43 in 2024).
- Operating Cash Flow: $2.10 billion (up significantly from $962.0 million in 2024).
- Capital Expenditures (Investing Activities): $2.05 billion (down from $2.22 billion in 2024).
- Total Assets: $60.96 billion (up from $59.59 billion at year-end 2024).
- Long-Term Debt: $26.21 billion (excluding current portion).
- Cash and Cash Equivalents: $343.7 million (up from $26.7 million at year-end 2024).
Material Changes vs. Prior Period
- Revenue Growth: Driven primarily by base distribution rate increases at PSNH (effective August 2024) and NSTAR Electric (effective January 2025), as well as higher revenues from CL&P's capital tracking mechanisms and increased wholesale market sales due to higher ISO-NE prices.
- Operating Expenses: Total operating expenses increased by $949.4 million. Notable increases include Depreciation ($70.7 million increase) and Amortization ($681.1 million increase, largely due to regulatory deferral adjustments at CL&P). Purchased Power and Transmission costs rose $81.7 million due to higher natural gas prices and volumes.
- Interest Expense: Increased by $71.9 million, primarily due to the absence of capitalized interest following the sale of offshore wind projects in late 2024 and higher short-term debt costs.
- Cash Flow Improvement: Operating cash flow more than doubled, driven by improved regulatory recoveries (specifically CL&P's non-bypassable FMCC and SBC mechanisms) and timing of storm cost payments.
Guidance, Outlook, and Risks
- Guidance: Management reaffirmed its 2025 earnings guidance range of $4.67 to $4.82 per share. Long-term EPS growth is projected at 5% to 7% through 2029.
- Dividends: A quarterly common share dividend of $0.7525 per share was paid on June 30, 2025.
- Strategic Transactions:
- Aquarion Sale: Eversource entered a definitive agreement to sell its Aquarion water distribution business for approximately $2.4 billion in cash. The sale is expected to close in late 2025, with proceeds used to pay down parent debt. Assets are classified as "Held for Sale."
- Offshore Wind: Following the sale of its 50% stake in South Fork and Revolution Wind projects, Eversource recorded a contingent liability of $296 million (down from $365 million) related to post-closing purchase price adjustments and cost overruns.
- Regulatory Developments:
- PSNH: NHPUC approved a permanent rate increase of $100.7 million effective August 1, 2025, and a new alternative regulatory framework with annual revenue adjustments.
- CL&P: PURA issued proposed final decisions on performance-based regulation (PBR) elements. A prudency review of storm costs totaling over $900 million is ongoing.
- FERC ROE Complaints: Four pending complaints regarding transmission Return on Equity (ROE) remain unresolved. Eversource maintains a reserve of $39.1 million for the second complaint period but cannot estimate the range of loss for all proceedings.
- Legislative Impact: The "One Big Beautiful Bill Act" (OBBBA) signed in July 2025 restores bonus depreciation for non-regulated affiliates but phases out certain clean energy tax credits for projects starting construction after July 2026.
Investor Verification Checklist
- Aquarion Closing: Verify the final closing date and net proceeds of the Aquarion water business sale, and confirm the specific debt reduction plan.
- Offshore Wind Liability: Monitor the $296 million contingent liability related to the Revolution Wind project for potential increases due to construction cost overruns or ITC qualification issues.
- FERC ROE Resolution: Track the status of the four pending FERC transmission ROE complaints, as a resolution could materially impact future earnings and require refunds.
- Storm Cost Recovery: Review the outcomes of the prudency reviews for CL&P and PSNH storm costs, which represent significant regulatory assets.
- Interest Rate Exposure: Assess the impact of rising interest rates on short-term commercial paper borrowings and the absence of capitalized interest on new projects.